Professionalism and Ethics of Accounting in Financial

European Scientific Journal September 2019 edition Vol.15, No.25 ISSN: 1857 – 7881 (Print) e - ISSN 1857- 7431

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Professionalism and Ethics of Accounting in Financial

Reporting: An Overview of Nigerian Scenerio

Bushi Kasimu Musa, (MSc /MBA) Independent Researcher and Consultant

Doi:10.19044/esj.2019.v15n25p224 URL:http://dx.doi.org/10.19044/esj.2019.v15n25p224

Abstract

This paper focuses on evaluating the concept of professionalism and

ethics of accounting standards on the quality of financial reports in Nigeria.

To achieve this objective, data was collected from primary and secondary

sources. Questionnaires were distributed with the use of simple random

sampling technique in selecting a sample size of 75, consisting of accountant

and auditors and relevant data obtained. Accounting ethics was measured with

professional independence and professional competence, while financial

reporting quality was measured using the qualitative attribute of dependability

and understandability. Ordinary Least Square was utilised to develop a

theoretical equation model to test the formulated hypotheses.

Understandability was significant at 5% level in associating with both

competence and independence respectively. Reliability was found to be

significant at 5% level, only with independence. On the basis of these findings,

therefore, it was recommended that corporate bodies should establish ethics

compliance department to enhance the enforcement of ethical compliance in

the various economy institutions.

Keywords: Professional Independence Ethics, Accounting Ethics, Financial

Report

Introduction

There has been growing concern in recent times that the recent wave

of corporate scandals, which are associated with ethical bankruptcy in the

accountancy practice, is eroding the relevance of accounting and financial

reporting quality. The various corporate collapses have led to increased

scrutiny of deficiencies in the financial reporting process and corporate

disclosure requirements of corporate organizations. This has had a negative

and cumulative impact on the perceived credibility of financial reporting. This

concern is now at the front position of public debate about the accounting

profession and its effectiveness (IFAC, 2003). It should be noted that the core

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of accounting profession in every organization is ethics. The quality of

financial reporting points to a limit in which the financial reports of an entity,

its economic status, and functions, which are measured over period of time,

are presented honestly (Talebnia, Salehi & Jabbarzade, 2011). Steering and

Working Committees on Accounting (2004), which examined how public

confidence in financial reporting can be restored, noted that accounting and

auditing systems, and policy in the management process, requires a set of best

practices for governance and financial reporting. The extent to which financial

reporting is perceived to be true and trusted depends on far more than the

actions and decisions of individuals or sophisticated “mechanisms” for the

whole system (Enderle, 2006). This is because business practices,

environments, and culture are known to possess the capability, in varying

degrees, to affect the value of the financial reporting systems and, hence, its

confidence (Gilligan, 1977; Langenderfer & Rockness, 1990; Paradice &

Dejoie, 1991). Therefore, reliability of, and trust in the financial reporting

system cannot be an issue of either personal or institutional ethics alone

(Brenkert, 2004).

2. Statement of Problem

Ethics in professional accounting are of utmost importance. However,

the widespread corruption in the society and the failure of organization in

every parts of the world have once more increased the need for accounting

professionals to adhere strictly to the codes of professional ethics prescribe by

international accounting bodies. According to Ogbonna and Appeah (2011),

the widespread corruption in the business environment seems to be the order

of the day in all societies. Recently, business ethics have attracted renewed

attention globally due to the several notorious corporate scandals like those of

Enron, WorldCom, Arthur Anderson, Tyco International, Adelphia, Cadbury

PLC, Lever Brothers PLC amongst others (Ojeka, Ogundana & Iyoha, 2017).

Unfortunately, these collapses have led to a widespread disregard for the

reputation of the accounting profession. Additionally, the growing importance

of government regulations, the amplified scrutiny of media, and the increasing

pressure from different stakeholders have placed the business ethics challenge

on the strategic agenda of virtually all firms (Weaver, Trevino & Cochran,

1999). The ethical lapses among public accountants have necessitated a

revision of the accounting professional standards (Rist, 2002). Interestingly,

professional accountant working in accounting firms are faced with new

challenges within the profession as a result of the debacles of large

corporations(Swift,2002).

Organizational cultures and environment pose a good opportunity for

accountants to exploit the loopholes in reporting and financial management.

expected to foster the growth of ethical education and awareness, they are


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often faced with stiff resistance from the top level management (Fisher&

Lovell, 2009).

Accountants have obligations to shareholders, creditors, employees, suppliers,

the government, the accounting profession, and the general public at large

Therefore, behaving ethically is an essential and expected trait. In this regard,

an accountant bears the consequences of his moral choices not only based on

his own life but also the lives of other people. The nature of the work carried

out by accountants and auditors require a high level of ethics. Furthermore,

shareholders, potential shareholders, and other users of the financial statement

rely heavily on their professional competence.

3. Objectives of the Study

The main objective of the study is to critically examine the effect of

accounting ethics on the quality of financial reports of Nigerian organizations.

The specific objectives are:

Although finance and accounting departments in most organizations

are To evaluate the professionalism and ethics of accounting in Nigeria;

To examine the effect of disclosure on the quality of financial reports

in Nigeria;

To examine the effect of objectivity on the quality of financial reports

in Nigeria;

To examine the effect of integrity on the quality of financial reports in

Nigeria;

To assess the effect of competence on the quality of financial reports

in Nigeria.

4. Formulation of the Hypotheses

H01: Professional independence of accountants and auditors does not have

significant effect on the understandability of their financial reports.

H02: Professional competence of accountants does not have significant effect

on the understandability of their financial statements

H03: Professional independence of accountants does not have significant effect

on the reliability of their financial reports

H04: Professional competence of accountants does not have significant effect

on the reliability of their financial reports

5. Literature Review

Ethics

Fisher (2004) highlighted the concept of an individual’s personal belief

about what is right or wrong, good or bad. It is the arbiter of an individual's

evaluation of the "rightness" or otherwise of his or her actions. Miner (2002)

defined ethics as right or wrong actions that stems from the value and


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expectation of society. Mintz and Morris (2007) notes that ethics are

acceptable standards of behavior that define how people ought to act (i.e.,

prescriptive), and not how people really act (i.e., descriptive).

Nevertheless, the generic sociological meaning of the concept of ethics

seems to provide a common ground for most of them. Sociologically speaking,

ethics are provided in order to render behavior intelligible and to "prevent

conflicts from arising by bridging the gap between action and expectation"

(Scott & Lyman, 1968). Though it is often regarded as subjective, it is

traceable to the foundation of an individual's belief system and judged within

its context. On the other hand, Logsdon and Yuthas (1997) noted that the

ethical stance of a firm is constructed based on the expectation of society. In

essence, this refers to the legitimate claims made by the constituencies to

whom the firm interacts. According to Hanekom (1984), the question of ethics

is one that is linked with the history of mankind. Ethics deals with the

character, conduct, and morals of human beings. It deals with good or bad,

right or wrong behaviour. It evaluates conduct against some absolute criteria

and puts negative or positive values on it. It is the reflective study of what one

ought to do, or how one ought to live. Cole (2002) conceptualized that ethics

is a set of moral principles or values used by organization to steer the conduct

of the organization itself and its employees in all their business activities, both

internal and external, and in relation to the outside world. Ethics is interpreted

to be a certain culture of society that includes a specific form of values while

in the scholarship researching. Thus, it is an ideology from social context or

codes of conduct. The interpretation of the meaning associated with ethics

varies greatly from society to society.

Ethical problems are a very relevant issue present in many aspects of

real life. These situations can be examined through several branches and under

several grids of analysis, modern or classic (Filipe et al., 2011). A squishing

mark of the accounting profession is its acceptance of the responsibility to act

in the public interest (IFAC, 2005). Key qualities which appear in the codes

of ethics of professional bodies include independence, integrity, objectivity,

competence, and judgment. For example, the ICAEW’s introduction to its

‘Guide to professional Ethics’ (ICAEW, 1997) includes a list of five

fundamental principles which either expressly mentions or clearly implies all

of these qualities, along with other related qualities such as honesty, fair-

dealing, truthfulness, courtesy, skill and diligence (Growthorpe, 2005).

Professional Ethics

According to International Federation of Accountants (2006) in its

code of ethics for professional accountants, a distinguishing mark of the

accountancy profession is its acceptance of the responsibility to act in the

public interest. This code establishes the fundamental principles of


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professional ethics for professional accountants and provides a conceptual

framework for applying those principles. The conceptual framework provides

guidance on fundamental ethical principles. Professional accountants are

required to apply this conceptual framework to identify threats to compliance

with the fundamental principles to evaluate their significance and, if such

threats are other than clearly insignificant, to apply safeguards to eliminate

them or reduce them to an acceptable level. This is done such that compliance

with the fundamental principles is not compromised.

Professional accountant is required to comply with the following fundamental

principles:

i) Integrity

The principle of integrity imposes an obligation on all Chartered

Accountants to be straightforward and honest in professional and business

relationships. Integrity also implies fair dealing and truthfulness.

ii) Objectivity

A professional accountant should not allow bias, conflict of interest, or

undue influence of others to override professional or business judgments. The

principle of objectivity imposes an obligation on Chartered Accountants to be

fair, intellectually honest, and free of conflicts of interest. Regardless of

service or capacity, Chartered Accountants should protect the integrity of their

professional services and maintain objectivity in their judgment. According to

Izedonmi (2012), the principle of objectivity imposes a serious obligation on

all accountants whether in private practice or industry to avoid jobs,

assignments, relationships, and situations that are capable of compromising

their professional judgment due to either coercion, undue influence from

people, conflict of interest or even bias.

iii) Independence

Independence is an attitude of mind characterized by integrity and

objectivity in approach to audit assignment. Arowoshegbe, Uniamikogbo and

Atu (2017) stated that auditor’s independence means that when performing his

statutory duties, an auditor considers the interest of third parties, most of

whom are unknown to him who will be placing reliance on the accuracy of

financial statements prepared by him, to be of paramount importance.

According to the Institute of Chartered Accountants of Nigeria (ICAN)

(2009), Independence of an Auditor is of two types:

1.Independence of Mind: The state of mind that permits the

expression of a conclusion without being affected by influences that


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compromise professional judgment, allowing an individual to act with

integrity, and exercise objectivity and professional skepticism.

3. Independence in Appearance: The avoidance of facts and

circumstances are so significant such that a reasonable and informed

third party, having knowledge of all relevant information, including

safeguards applied, would reasonably conclude that a firm or a

member of the assurance team’s integrity, objectivity, or professional

skepticism had been compromised. As opined by Izedonmi (2012),

independence is a very crucial issue in enhancing the auditor’s

objectivity in his findings and opinions expressed in financial

statements. Therefore, not only must the auditor be independent in fact

and in attitude of mind, he must also be considered to be independent.

4.

iv) Professional Competence and Due Care

A professional accountant has a continuous duty of maintaining

professional knowledge and skill at the level required to ensure that a client or

employer receives competent professional service based on current

developments in practice, legislation, and techniques. A professional

accountant should act diligently and in accordance with applicable technical

and professional standards when providing professional services.

v) Confidentiality

A professional accountant should respect the confidentiality of

information acquired as a result of professional and business relationships and

should not disclose any such information to third parties without proper and

specific authority unless there is a legal or professional right or duty to

disclose. Confidential information acquired as a result of professional and

business relationships should not be used for the personal advantage of the

professional accountant or third parties. Nevertheless, it is not always possible

to conduct evaluations without identifying information, such as names. ICAN

(2009) stated that the principle of confidentiality imposes an obligation on

Chartered Accountants to refrain from disclosing to persons outside the firm,

or within the firm or employing organization, confidential information

acquired as a result of professional and business relationships without proper

and specific authority unless there is a legal or professional right or duty to

disclose such.

vi) Professional Behavior

A professional accountant should comply with relevant laws and

regulations and should avoid any action that discredits the profession. The

code specifically stated that professional accountants should take qualitative


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and quantitative factors into account when considering the significance of a

threat. If the professional accountant cannot implement appropriate

safeguards, the professional accountant should decline or discontinue the

specific professional service involved or where necessary resign from the

client (in the case of a professional accountant in public practice) or the

employing organization (in the case of a professional accountant in

business). If a professional accountant inadvertently violate a provision of this

code, such an inadvertent violation, depending on the nature and significance

of the matter, may not compromise compliance with the fundamental

principles provided. Once the violation is discovered, the violation is corrected

promptly and any necessary safeguards are applied.

vii) Conformity to Technical Standard

According to Atu (2009), audit work should be done with due

professional skill, care, and caution in conformity with approved auditing

standards and statutory provisions and other regulatory and operational

guidelines such as SAS, IAS, AG, IAG and the likes.

viii) Advertisement for Professional Work

Accountants are not expected to advertise their services and skill

unfairly. No one should give undue prominence to his signboard or advertise

in any media unless: recruiting staff for his firm; recruiting staff for his client;

acting for client in buying and selling of properties; opening a new office or

changing the address of the practice; announcing the appointment of members

to important post; and placing congratulatory messages or obituaries in the

dailies in respect of members (Atu, n.d.).

ix) Retention of Working Papers

Working papers should be retained as follows:

• Taxation working papers 7 years;

• Files of chargeable assets 11 years;

• Files of members as trustee 7 years;

• Files for voluntary liquidation 5 years.

(j) Client’s Money

Client’s money should be paid in a separate bank account and never to the

accountant’s personal or firm account.

Concept of Financial Reporting

Glautier and Underdown (2001) stated that the primary objective of

financial reporting is to communicate economic measurement of an

information about resources and information about the resources held by entity


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and performance of the reporting entity, which is useful to those having the

right to such information. According to Alexander and Britton (2000), the

fundamental objective of corporate report is to communicate economic

measurements of and information about the resource and performance of the

reporting entity, which is useful to those having the rights to such information.

Nzotta (2008) stated that financial reports assist the user in evaluating the past

and present performance of the organization and its ability to maximize the

wealth of the shareholders. Furthermore, it assesses the ability of the firm to

create value and objective assessment of the value created over time, financial

reports insights into these resources held by an organization, the claims to

these resources including the obligation of the firm to transfer resource to other

entities and owners, and the effects of transactions, events, and circumstances

that changes its resource and claims to these resources (Glauter & Underdown,

2001; Nzotta 2008).

6. Theoretical Framework

Homa (2015) is of the view that there are five ethical theories, namely:

Utilitarianism, Egoism, Deontological Ethics, Categorical Imperative, and

Virtue Ethics. Utilitarianism focuses on the question of whether the action

benefits the people more than it harms them. It takes into consideration the

impact by everyone, including the individual. Individuals’ self-interests are

cast aside. All actions recommended are done to enhance the good of the

largest number of people, which is what philosophers termed as “altruism”

(Duska, 2011).

Egoism focuses on whether the action is good for us. Concerns of

oneself take priority over what might be best for others. It does not consider

what is fair to all human beings, but focuses on the belief that people should

act in their best interest (Duska, 2011). Deontological Ethics focus on fairness.

Fairness takes priority over any consequences the actions would have. The

overall key points to this theory are a focus on fairness, rights, commitments,

and doing the right thing. People should not only think of their own wants and

desires but also that of others (Duska, 2011).

Categorical Imperative goes along with deontological theory, and the focus is

on people being treated fairly. There is also a focus on leading by example. If

you want others to act ethically, then you must also act ethically. This theory

shows that all people are equal and must abide by the same rules (Duska,

2011). Virtue Ethics focus on character traits that are acknowledged across

cultures. There is a focus on reaching the end goal or purpose to achieve full

potential. Focus is on virtues and moral character and not on duties, rules, or

consequences. The emphasis has been taken away from the consequences of

the actions, and it focuses on the kind of person who is performing the action

(Sadler, 2011).


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7. Methodology

The population of the study ideally should comprise of all staff of audit

firms in Nigeria. The study, however, focused on accounting staff of the audit

firms in the major business centers across Nigeria. Considering the difficulty

of observing the entire population, the simple random sampling technique was

utilized in selecting a sample size of 75 consisting of accountants and auditors

in Lagos, Rivers, Kano, Oyo, Anambra, and Abuja. Regression analysis was

used to build the working model, expressing the hypothesized relationship

between the independent variables and the dependent variable. In formal

terms, the research is quantitatively expressed in the following equations:

RLB j = β0 + β1 PRF + β2 INV + β3 COV --------------- (1)

UNV j =α0 + α1 PRF + α1 INV + α1 COV -------------- (2)

Where α and β are parameters of the regression equation, PRF and INV are

measures of the independent variables (PRF is acronym for professional

competence, INV is acronym for independence), UNV and RLB are

understandability and reliability respectively which are proxies to the

dependent variable, and COV is the control variable. While α0 and β0 can take

any value and direction, the same cannot be said for the other coefficients (α1,

β1, α2,and β2). In line with the hypotheses of the study, the a priori expectation

for the direction of association was measured by the slopes of the regression

lines of equations 1 and 2 as follows:

α1> 0, α2> 0, β1> 0, and β2> 0

Data Analysis and Discussion of Findings

Two copies of questionnaire were distributed to each of the firms in

the list. The questionnaire was designed using the five-point Likert scale of

strongly agree (5), agree (4), indifference (3), disagree (2), and strongly

disagree (1). Section A of the questionnaire was constructed using “leading

measures” of measuring organization performance. Leading measures are

nonfinancial measures relating to customers perspective, internal business

process perspective, and learning and growth perspective. Section B of the

questionnaire was designed to include questions that pertain to ethics and

organizational performance.

A total of 90 copies were dispatched successfully but only 80 were

returned, thereby recording a response rate of 89 percent. Out of the returned

75 filled questionnaires, 5 were discarded because of their failure to meet the

necessary conditions for inclusion in the final analysis. The whole of the

remaining 75 copies of the questionnaires were used in the statistical analysis.


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Table 1. Variables:

Independent Overall

Score Verdict

Internal

Consistency

(Cronbach

Alpha)

EigenValues Proportion

Explained

Professional 2.5 Average 0.8008 3.248 74.9%

Competence 2.5 Average 0.8431 3.248 81.2%

Reliability 2.3 Very Low 0.8521 3.119 78.0%

Understandability 2.5 Average 0.9470 3.488 69.8%

Ownership Structure 2.2 Very weak 0.8550 2.327 77.6%

The variables seem to go in the same direction (low), suggesting that

all the variables are positively related. The implication of these scores is that

accounting ethics among accountants are positively correlated with the

financial statement quality produced by them. Thus, results from descriptive

statistics show that the overall average financial statement quality for the

investigated accountants is 48.90 per cent (or 2.540 on 5-point Likert scale).

On the other hand, results from descriptive statistics show that the overall

average accounting ethics of accountants is 50.08 per cent (or 2.599 on 5-point

Likert scale)

Furthermore, the strength and direction of relationships which were

observed, as measured by Pearson’s product moment correlation coefficients,

reveals bivariate relationship magnitude of between 0.542 (weak relationship)

and 0.952 (very strong relationship), both figures expressed in absolute terms. Table 2. Correlation Matrix

IND COM OWN REL UND

IND 1.000

COM 0.543 1.000

OWN 0.823 0.442 1.000

REL 0.952 0.552 0.857 1.000

UND 0.857 0.676 0.720 0.856 1.000

There are a total of two equations which expresses the hypothetical

relationships among the various variables of interest based on the current

study. Equation 1, without the OWN term, enables the testing of hypotheses 1

and 2. Similarly, equation 2 facilitates the testing of hypotheses 3 and 4.

Therefore, the tests of hypotheses are carried out in serial sequence of

equations beginning from equations 1 through equation 2 without the control

variable, and a repeat of test with the inclusion of the control terms.

Equation 1 Results Using the OLS technique, we obtained the results as presented in Table 3

below:


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Table 3. Summary Output (Equation 1)

Regression Statistics

Multiple R 0.893

R Square 0.799 Adjusted R Square 0.793

Standard Error 1.630

Durbin – Watson 1.969

Observations 75

Df SS MS F Significance F

Regression 2 720.556 360.228 135.631 0.0000

Residual 72 183.260 2.656

Total 74 903.726

Coefficients SE t Stat P-value Lower95% Upper95%

Intercept -0.1962 0.1941 -1.0108 0.3156 -0.5834 0.1910 IND 0.7463 0.0694 10.7545 0.0000 0.6078 0.8847

COM 0.3774 0.0813 4.6429 0.0000 0.2153 0.5396

With a coefficient of determination (adjusted-R2) of 0.793, there

appears to be a highly dependable relation between UND and the two proxies

of accounting ethics. The standard error of 1.630 indicates that the fitness of

the model is good. This is confirmed by the Fstatistic (135.631) and F-

significance with a near zero value. The model is stable and robust with mild

signature of positive autocorrelation as indicated by the Durbin-Watson

statistic of 1.969. It implies that about 79 per cent variability of financial

statement understandability can be explained by changes in the combined

independent variables of professional competency and independence. Both

COM and IND turned out to be positively signed as expected, with p-values

of 0.0000. Therefore at 5% level of significance, the null of zero coefficients

for both variables are rejected, thereby confirming their statistical

significance. Table 4. Summary Output (Equation 2)

Regression Statistics

_____________________________

Multiple R 0.953

R Square 0.911

Adjusted R Square 0.908

Standard Error 0.741

Durbin – Watson 1.897

Observations 75

df SS MS F Significance F

_________________________________________________________________________

Regression 2 375.982 187.991 342.827 0.000

Residual 72 37.837 0.548 Total 74 413.819

_______________________________________________________________________


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Coefficients SE t Stat P-value Lower95% Upper95%

________________________________________________________________________

Intercep -0.333 0.088 -3.7804 0.0003 -0.5094 -0.1575

IND 0.6733 0.0315 21.3538 0.0000 0.610 0.7362

COM 0.0422 0.0369 1.1437 0.2567 -0.0314 0.1159 ________________________________________________________________________

In respect to financial statement reliability, there seems to be a very

strong coefficient of determination (adjusted-R2) as indicated by the obtained

result (0.908). This means that the relationship between REL and the two

proxies of accounting ethics (COM and IND) is very strong, such that besides

COM and IND, there are other factors accounting for just about 9.4 per cent

of variability of REL. The standard error of 0.741 further confirms the model’s

goodness-of-fit. The F-statistic (342.827) and F-significance with a near-zero

value all bear testament to the overall structural fitness of the model. The

model is stable and robust with negligible traces of positive autocorrelation as

indicated by the Durbin-Watson statistic of 1.897. Of the two proxies of

accounting ethics, only IND turned out to be significant at 5%

level.Interestingly, both COM and IND also turned out to be positively signed

as expected.

Inconclusion, therefore, the result obtained leads to the acceptance of

H04 and rejection of H03. Table 5. Summary of Hypotheses Decision Table

Hypotheses Rejected accepted

H01 YES NO

H02 YES NO

H03 YES NO

H04 NO YES

Conclusion

The data analyses have produced a number of results. Professional

competence is observed to have significant and positive relation with financial

statement understandability. This means that the more the reporting

accountant is perceived to be professionally competent by financial statement

users, the better their understandability of the financial statement. This

analysis tends to suggest the notion that financial statement users’ perception

of the competence level of reporting accountants determines the users’

understandability of the financial statement. Membership to professional

accounting body should be determined by rigorous assessment of competency

test. Furthermore, existing members should be made to undergo mandatory

continuous competency training. Since man, by his nature, has a tendency

towards aversion to learning, it becomes imperative for members (both

existing and intending) to be compelled to learn the requisite skills and


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training. Hence, this gives further fillip to the interventionist argument of

regulation theory. The findings also propose that professional competence is

insignificantly but positively related with financial statement reliability. The

findings suggest that financial statement users’ perception of the reporting

accountants and auditors’ competence does not affect their reliability on the

financial statement produced. The findings of this study also stated that the

perceived professional independence of the reporting accountant in the

industry by financial statement users is positively and significantly associated

with their understandability and reliability of the financial statement. Finally,

this moderates the relationship between financial statement reliability and

accounting ethics, but it fails to moderate the relationship between financial

statement understandability and accounting ethics.

In general, these findings which are in agreement with those of Egini

and Dike (2014), and Ogbonna and Appah (2011), confirms the ethical theory

of relativism which holds that morality is relative to the norms of one’s culture.

This means that whether an action is right or wrong depends on the moral

norms of the society in which it is practiced. The same action may be morally

right in one society, but it can be morally wrong in another. For the ethical

relativist, there are no universal moral standards that can be universally

applied to all people at all times. The only moral standards against which a

society’s practice can be judged are by its own standards. Thus, professional

competence of the reporting accountant is perceived to be insignificant in

affecting the reliability of the financial statement. However, his perceived

level of independence affects his reliability.

Recommendations

To ensure that auditors and professional accountants abide by

professional ethical standards and guidelines as enshrined and recommended

in their professional body codes and other regulatory authorities, the following

policy recommendations are prescribed:

1. There should be more rigorous quality control measures by different

audit firms, and emphasis should be placed on quality monitoring by

the professional accounting bodies in Nigeria.

2. Extended audit tenure should be discouraged by corporate organization

and regulatory bodies in Nigeria.

3. Accounting professional bodies should recommend that a harder

punishment should be enforced on erring auditors in Nigeria.

4. The composition of the Board of Directors and Audit Committees

should be made up of people with corporate experience, proven

integrity, and financial expertise for member of audit committees

especially the chairman.


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5. Provide Detailed Foundation: The more descriptive and specific

ethics-related policies and procedures are, the easier it is to evaluate

behavior against ethics code.

6. Develop Metrics: Tangible ethics measures – adding ethics goals to

annual performance reviews and, where possible, tying compensation

to ethical behavior.

7. Create a Cross-functional Team: Include HR Professional, Ethics and

Compliance Manager, Internal Auditor, and Legal Manager.

8. Audit Efficiently: Create a plan and discuss the plan with staff

involved in the audit.

9. Look for Other Issues: Risk review: e.g., revenue – recognition,

implications, etc.

10. Respond consistently and communicate through the following:

a. Use ethics issues to obtain lessons learned.

b. Discipline ethics violation.

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Professionalism and Ethics of Accounting in Financial